Now that the EP is about to resume its work, what challenges do you foresee during the next months?

There has been a great deal that has been accomplished by the EU and especially by the EP in the first year of the new legislature. One of the most important developments has been the legislative response to the financial crisis. Nevertheless there have also been other achievements such as the agreement on SWIFT as well as strides forward in the field of health and consumer affairs with legislation coming into force that will act to improve the quality and safety of organ transplantation in the EU and thus also increase the transplantation rate.

While the end of the first year saw a number of these dossiers being finalised, there are also those that are still proving to be controversial, and agreement on the final draft of the legislation has yet to be reached. This is especially the case when it comes to the hedge funds directive as well as the European Financial Supervisory Framework (EFSF). Seeing as the procedure that must be followed in the case of these two dossiers is that of co-decision, both the EP as well as the member states represented in Council will have to come to an agreement before any concrete steps may be taken.

On the hedge funds directive many are arguing, especially the UK, that the regulatory requirements have gone too far and will place a heavy strain on the EU’s financial markets at a time when the struggle to exit the crisis is not over.

The EFSF in its current form will consist of an advisory body that will deal with macro-prudential supervision across the EU. In addition, the micro-prudential supervision of specific financial institutions will be the task of three committees that will be given further powers in order to be able to take concrete action when faced with a crisis. While the constitution of the advisory board does not present problems, the powers that will be given to the three committees remains extremely controversial. In this respect the EP is calling for these committees to have strong powers that will enable them to be as effective as possible. Reaching an agreement on this issue will be a challenge. Despite the fact that the EP has already missed its pre-summer break deadline, the ambition of those dealing with the negotiations has not waned and there is the hope that agreement will be reached in September so that such legislation would be able to come into force at the beginning of 2011.

Economic governance within the EU is an issue of contention. Many are suggesting that there should be a more stringent system of rules in place that will come into effect as soon as a member state defaults in terms of respecting its economic responsibilities. This becomes even more urgent when considering the effect that a eurozone member state could have on the eurozone in its entirety when in economic difficulty. Exemplifying such a situation is the Greek debt crisis that due to contagion risked spillover effects adversely affecting other member states.

A report that is currently being debated in the ECON Committee calls for such measures to be brought forward. I will be adding to this dossier through the Opinion that I am currently working on within the EMPL Committee. Such recommendations will thereafter be added to the final dossier should they be approved by ECON MEPs. It remains to be seen whether the proposals for stronger governance will find support within the EU.

The EU will surely face a great deal of pressure in order to strike a balance between the need to protect European markets through supervision and regulatory measures, the interests of member states as far as their constant struggle to retain their sovereignty and the importance of not stifling business during this crucial time.